All Forum Posts by: Ragan Manning

@Sunny Singh I would just recommend getting a REI bookkeeper. Not all bookkeepers understand this industry so you need to make sure they are at least niche specific. If you use QBO, make sure to at least get QBO plus to have class tracking.

@Wale Lawal

Would their best option be to do a 1031 exchange then since they are most worried about capital gains? 

@Calvin Schmeling

I do think it is important to have a team in place you trust and you know can bring knowledge. They are only going to help you succeed and give you information to benefit your business. With that being said, since you're starting out, I don't necessarily think it's imperative you invest heavily in this. I think a lot of research can be done and do it yourself. You can do a lot of the bookkeeping in excel, until you start growing I wouldn't necessarily say you need QBO yet. I've had multiple clients come to me with excel spreadsheets and closing documents after a couple of deals. If you do it yourself, to get the max benefit from investing you do need to make sure you keep good records. I would revisit this when you have 3 or more properties and make sure you have your QBO set up correctly. I do think a good REI tax professional could be to your benefit obviously, but again, I believe you can wait till you are at 2 or 3 properties depending on the type of REI and profitability scale. Never stop researching and gaining knowledge. Knowing yourself is the most important key, knowing when you're over your head and need to outsource or when you know you're talent is in deal making. Focus your energy on where your excel most and outsource the rest.

I'm working with someone who is trying to sell their land with a pond (no structure). 

They are hoping a commercial company will come out and buy it since the location is right outside Houston, Texas on 25 acres. 

The seller is looking at different options, reinvesting all (1031) or only a portion then paying capital gains on the uninvested portion. 

Their real estate agent/broker brought up owner financing but if they entertain that option, from my understanding, they will be paying more capital gains than the two options mentioned above. I feel like the agent/broker is pushing this because they want to keep the deal in-house and don't have a big enough buyer for the full purchase. 

Seeking advice and advisement to help them out with some options.

cross-posted on BiggerPockets FB page

You can have multiple properties in one LLC or each property in their own LLC. Obviously people do 1 house per LLC for more protection but I don't think either way is wrong. You can put 2-3 houses per LLC but I wouldn't exceed much more than that. I would talk to a tax professional about a holding company and parent account but that to me is the safest route if you're planning on really growing your portfolio. Having a S Corp could be very beneficial depending on the type of REI you're doing. I can't say if local vs virtual is better. All of my clients are 100% virtual and they're located all around the US. I would just advise you get your COA set up properly because that's the backbone of your business. I would also definitely recommend QBO plus because it has class tracking

@Gregory R Ley I agree with @Todd Lennig. You do not need a bank account for each property. Best practice was mentioned above about using QBO with class tracking and you could look into projects. The set up is essential. Once you set it up correctly I would say you POTENTIALLY could manage it yourself then pay a bookkeeper for monthly advisement and reconciliations.  This is how a lot of my clients handle their books 

Hey Michael, 

Maybe I can answer the accountant side if you have a specific question. :) If you're just looking for someone to help with your books in that area I might be able to get you a referal. Let me know what you need! 

Hey Reid!
QBO is great for tracking any business expenses rather it's for short or long-term rentals or even any other part of the REI sector you want to tackle. The best thing about QBO is once you understand it, you make it work for you and not the other way around. I would not recommend using QBO for your personal finances. It is a waste of money in my opinion. There are plenty of free apps you can use to track all that! Hope this helps!